GROUND LEASE AGREEMENT

THIS GROUND LEASE AGREEMENT (this “Lease”) is made and entered into to be effective as of the [___] day of [_______________], 20[__], between Valero Refining Company-Tennessee, L.L.C., a Delaware limited liability company (herein called “Lessor”) and Valero Partners Memphis, LLC, a Delaware limited liability company (herein called “Lessee”).

WHEREAS, on the date hereof, Lessee has acquired from Lessor all of the truck loading bays, additive tanks, piping, valves, gauges, cathodic protection, SCADA equipment, instrumentation, buildings, utility connections, equipment and other facilities and improvements, other than the land (collectively, the “Terminal Facilities”), comprising a refined petroleum products truck rack terminal located at 321 West Mallory Ave., Memphis, Tennessee (the “Terminal”); and

WHEREAS, Lessor has agreed to lease to Lessee and Lessee has agreed to lease from Lessor the land on which the Terminal Facilities are located, on the terms and conditions set forth in this Lease;

NOW, THEREFORE, for and in consideration of the premises, the mutual agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee covenant and agree as follows:

1.1    Certain Defined Terms. Unless the context otherwise requires, the following terms shall have the respective meanings set forth in this Section 1.1:

“Additional Rent” has the meaning set forth in Section 4.2.

“Applicable Law” means all applicable constitutions, laws (including common law), treaties, statutes, orders, decrees, rules, injunctions, licenses, permits, approvals, agreements, regulations, codes, ordinances issued by any Governmental Authority, including applicable judicial or administrative orders, consents, decrees, and judgments, published directives, guidelines, governmental authorizations, requirements or other governmental restrictions which have the force of law, and determinations by, or interpretations of any of the foregoing by any Governmental Authority having jurisdiction over the matter in question and binding on a given Person, whether in effect as of the date hereof or thereafter and, in each case, as amended.

“Base Rent” has the meaning set forth in Section 4.1.

“Business Day” means any Day except for Saturday, Sunday or an official holiday in the State of Tennessee.

“Commencement Date” has the meaning set forth in Section 3.1.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

“Day” means the period of time commencing at 12:00 a.m. on one calendar day and running until, but not including, 12:00 a.m. on the next calendar day, according to local time where the Premises are located.

“Environmental Cleanup” has the meaning set forth in Section 10.4.

“Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law relating to pollution or protection of human health, natural resources, wildlife and the environment or workplace health or safety including the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq., the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. §§6901 et seq., the Clean Air Act, as amended, 42 U.S.C. §§7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. §§1251 et seq., the Toxic Substances Control Act, as amended, 15 U.S.C. §§2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C. §§2701 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §§300f et seq., the Hazardous Materials Transportation Act of 1994, as amended, 49 U.S.C. §§ 5101 et seq., and other environmental conservation and protection laws and the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651 et seq, and the regulations promulgated pursuant thereto, and any state or local counterparts, each as amended from time to time.

“Environmental Permit” means any permit, approval, identification number, license, registration, certification, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law, including applications for renewal of such permits in which the application allows for continued operation under the terms of an expired permit.

“Expense Reimbursement” has the meaning set forth in Section 4.2.

“Governmental Authority” means any federal, state, tribal, foreign or local governmental entity, authority, department, court or agency, including any political subdivision thereof, exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, and including any arbitrating body, commission or quasi-governmental authority or self-regulating organization of competent authority exercising or enlisted to exercise similar power or authority.

“Hazardous Substance” means (a) any substance, whether solid, liquid, gaseous, semi-solid, or any combination thereof, that is designated, defined or classified as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated under any Environmental Law, including any hazardous substance as defined under the Comprehensive Environmental Response, Compensation,

and Liability Act, as amended, and including asbestos and lead-containing paints or coatings, and (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.

“Interest Rate” means an annual rate (based on a 360-day year) equal to the lesser of (i) two percent (2%) over the prime rate as published under “Money Rates” in the Wall Street Journal in effect at the close of the Business Day on which payment was due and (ii) the maximum rate permitted by Applicable Law.

“Lease Year” has the meaning set forth in Section 3.1.

“Lessee Indemnified Party(ies)” means Lessee and all other members of the Partnership Group and their respective officers, directors, shareholders, unitholders, members, managers, employees, agents, representatives, successors and assigns.

“Lessee Responsible Parties” has the meaning set forth in Section 10.1.

“Lessor Indemnified Party(ies)” means Lessor and its ultimate parent company and their Affiliates (other than members of the Partnership Group) and their respective officers, directors, shareholders, unitholders, members, managers, employees, agents, representatives, successors and assigns.

“Losses” means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.

“Omnibus Agreement” means that certain Omnibus Agreement dated [*], among Valero, the Partnership, Valero Energy Partners GP LLC, and certain of their Affiliates, as the same may be amended from time to time.

“Partnership” means Valero Energy Partners LP.

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of [*], as the same may be amended from time to time.

“Partnership Change in Control” means Valero ceases to Control the general partner of the Partnership.

“Permitted Exceptions” has the meaning set forth in Section 2.2.

“Partnership Group” has the meaning ascribed to such term in the Partnership Agreement.

“Permitted Transferee” has the meaning set forth in Section 17.3.

“Permitted Use” has the meaning set forth in Section 6.1.

“Permits” means all permits, licenses, franchises, authorities, consents, and approvals, as necessary under applicable Environmental Laws for operating the Terminal and/or the Premises.

“Person” means any individual or entity, including any partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, unincorporated organization or Governmental Authority (or any department, agency or political subdivision thereof).

“Premises” means those certain tracts or parcels of land located in Memphis, Shelby County, Tennessee, more particularly described or identified on Exhibit A attached hereto and made a part hereof for all purposes.

“Refinery” means the Refinery owned and operated by Lessor that is situated adjacent to the Terminal.

“Refinery Site-Wide Permits” means those Permits under which Lessor, immediately prior to the Commencement Date, operated the Refinery and the Terminal.

“Release” means any spilling, leaking, seeping, pumping, pouring, emitting, emptying, injecting, discharging, escaping, leaching, dumping, disposing or releasing of any Hazardous Substances into the environment (including the air, soil, surface water, or groundwater) of any kind whatsoever, but not any offsite disposal or treatment in accordance with Environmental Law.

“Rental” or “Rent” has the meaning set forth in Section 4.5.

“Tax Reimbursement” has the meaning set forth in Section 4.2.

“Taxes” means all federal, state and local real and personal property ad valorem taxes, assessments, and other governmental charges, general and special, ordinary and extraordinary, including but not limited to assessments for public improvements or benefits assessed against the Premises, Terminal or Terminal Facilities or the use or operation thereof during the Term, including, but not limited to, any federal state or local income, gross receipts, withholding, franchise, excise, sales, use, value added, recording, transfer or stamp tax, levy, duty, charge or withholding of any kind imposed or assessed by any Governmental Authority, together with any addition to tax, penalty, fine or interest thereon. The term “Taxes” does not, however, include federal or state income taxes or franchise taxes imposed on Lessor.

“Term” has the meaning set forth in Section 2.1.

Terminal Improvements” and “Material Terminal Improvements” have the meanings set forth in Section 7.1.

“Utility Reimbursement” has the meaning set forth in Section 4.2.

“Valero” means Valero Energy Corporation.

1.2    References. As used in this Lease, unless a clear contrary intention appears: (a) the singular includes the plural and vice versa; (b) reference to any Person includes such Person’s successors

and assigns but, in the case of a Party, only if such successors and assigns are permitted by this Lease, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) reference to any gender includes each other gender; (d) reference to any agreement (including this Lease), document or instrument means such agreement, document, or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Lease; (e) reference to any Section means such Section of this Lease, and references in any Section or definition to any clause means such clause of such Section or definition; (f) “hereunder,” “hereof,” “hereto” and words of similar import will be deemed references to this Lease as a whole and not to any particular Section or other provision hereof or thereof; (g) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; and (h) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including.”

2.1    Demise of Premises and Term. Lessor, in consideration of the Rent to be paid and of the covenants and agreements in this Lease to be performed by Lessee, does hereby lease and demise unto Lessee, and Lessee hereby leases from Lessor, the Premises, upon and subject to the terms, covenants and conditions set forth in this Lease.

2.2    “Subject to” Restrictions, Etc.; Reservations. This Lease is expressly granted by Lessor and accepted by Lessee subject to all applicable building, zoning and other ordinances and governmental requirements affecting the Premises and to all restrictions, covenants, encumbrances, rights-of-ways, easements, exceptions, reservations and other matters of record encumbering or affecting the Premises. Furthermore, subject to the rights of Lessee hereunder, Lessor reserves the right to grant any, easements, licenses, and other similar agreements affecting the Premises, including, without limitation, utility and pipeline easements (collectively referred to for purposes of this paragraph as “Easements”), provided that, (i) the Easement shall be located in a manner that minimizes interference with the operations of Lessee at the Premises and does not increase any operational cost or risk to Lessee, while also minimizing construction and operational costs and risks for Lessor; and (ii) in connection with any and all work performed and operations conducted within the Premises, the Easement holder, including its employees, agents, invitees, contractors and subcontractors, shall comply with Lessee’s standard safety and insurance requirements for contractors performing similar types of work within the Premises. All plans and specifications for an Easement holder’s improvements to be located on the Premises shall be subject to Lessee’s prior review and approval (such approval not to be unreasonably withheld, conditioned or delayed so long as such improvements meet Lessee’s own standards for similar improvements on the Premises). The matters referenced in this Section 2.2 are the “Permitted Exceptions”.

2.3    Acceptance of Premises. Lessee acknowledges that it is familiar with the Premises and its condition. Lessee accepts the Premises in its “AS-IS,” “WITH ALL FAULTS” physical condition as of the Commencement Date, subject to the terms and conditions of this Lease. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, OR

ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY, SUITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, AND INCLUDING WITHOUT LIMITATION, (I) THE CONDITION OR SUFFICIENCY OF THE PREMISES FOR LESSEE’S INTENDED USE, (II) THE CONDITION OR ZONING STATUS OF THE PREMISES, OR ANY OTHER FACT OR MATTER RELATING THERETO, OR (III) WHETHER ANY OF THE PREMISES CONTAINS ANY SUBSTANCE OR MATERIAL WHICH IS OR MAY BE IN VIOLATION OF ANY ENVIRONMENTAL LAW. Lessee acknowledges that, except as may be otherwise expressly provided herein, in no event shall Lessor have any obligation for any defects in the Premises or any limitation on its use. The taking of possession of the Premises shall be conclusive evidence that the Premises was in good condition at the time possession was taken.

3.1    The term of this Lease (the “Term”) shall be for 20 years commencing on [_____] (the “Commencement Date”) and unless sooner terminated pursuant to any provision hereof shall end at midnight on [____]. In the event the aforesaid Commencement Date shall occur on a date other than the first day of the calendar month, then the Term of this Lease shall be for the number of full lease years plus the number of days remaining in the month in which the Term commences. For purposes of this Lease, the term “Lease Year” shall mean a period not to exceed twelve (12) calendar months commencing on the Commencement Date (in the case of the first Lease Year) and January 1 in other years, and ending on December 31 of the same year or the last day of the Term (in the case of the last Lease Year).

4.1    Base Rent. Lessee shall pay to Lessor annual base rent (“Base Rent”) in the initial amount of $35,007.00 per Lease Year, payable in equal monthly installments on or before the first day of each month in the amount of $2,917.25. Commencing with the Lease Year that begins on January 1, 2016, Base Rent for each Lease Year shall be equal to the product of the Base Rent payable during the immediately preceding Lease Year multiplied times 1.015, and shall be payable in equal monthly installments on or before the first day of each month. If any installment of Base Rent falls due on a day that is not a Business Day, then such installment shall be due and payable on the next day that is a Business Day. Base Rent for any partial Lease Year and/or month at the beginning and/or end of the Term shall be prorated based on the number of days during such Lease Year and/or month that this Lease was in effect.

4.2    Additional Rent. Lessee will pay to Lessor, as additional rental hereunder in the manner set forth below (the “Additional Rent”), an amount equal to (i) the Taxes for each Lease Year during the Term (the “Tax Reimbursement” required pursuant to Section 9.2 hereof, and (ii) the costs and expense of utilities for the Terminal, not paid directly by Lessee as set forth in Section 5.1 hereof (the “Utility Reimbursement” and together with the Tax Reimbursement, the “Expense Reimbursement”).

4.3    Accrual and Payment of Rent. All Rent shall be payable in immediately available funds to an account specified in writing by Lessor from time to time, or at Lessor’s address set forth in Section 19.12 (or at such place or places as Lessor may from time to time direct), free from all claims, demands, set offs, or counterclaims against Lessor of any kind or character. Any delinquent payment (that is, any payment not made within five calendar days after the due date) shall, in addition to any other remedy of Lessor, incur a late charge of 5% (which late charge is intended to compensate

Lessor for the cost of handling and processing such delinquent payment and should not be considered interest) and bear interest at the Interest Rate, such interest to be computed from and including the date such payment was due through and including the date of the payment; provided, however, in no event shall Lessee be obligated to pay a sum of late charge and interest higher than the maximum rate permitted by Applicable Law.

4.4    Independent Covenant. The obligation of Lessee to pay Rent is an independent covenant, and no act or circumstances whatsoever, whether such act or circumstances constitutes a breach of a covenant by Lessor or not, shall release Lessee of the obligation to pay Rent.

4.5    Rental. Wherever the term “Rental” or “Rent” is used under the terms of this Lease it shall be deemed to refer to the Base Rent and Additional Rent due hereunder as well as any additional rental due hereunder unless the context specifically states otherwise.

5.1    Utilities. All utilities shall be separately metered or charged directly to Lessee by the provider, except for electricity that is currently jointly metered with the Refinery. Lessee shall pay, prior to delinquency, for all water, gas, telephone, sewage, refuse and trash collection, and other utilities and services (other than electricity) used in or about the Premises, all maintenance charges for utilities, and any storm sewer charges or other similar charges for utilities imposed by any governmental entity or utility provider, together with any taxes, penalties, surcharges or the like pertaining to Lessee’s use of the Premises. Lessor agrees to provide Lessee with electricity necessary for Lessee’s operation of the Terminal consistent with past practice. If Lessee’s electrical load at the Terminal increases above historical rates, Lessor will only be required to supply the increased load to the extent Lessor’s existing electrical infrastructure is capable of doing so without detriment to the safe and reliable operation of the Refinery. Lessee shall reimburse Lessor for all electricity consumed at the Terminal, calculated in a manner mutually reasonably agreed to by the parties, at the same rates that Lessor is required to pay its provider, plus any taxes and other applicable fees (but without any markup by Lessor). If Lessor’s actual cost of providing electricity materially changes or Lessee’s use of electricity materially changes, Lessor or Lessee may request an adjustment to the Utility Reimbursement by an appropriate amount, and the other party will not unreasonably refuse to grant such adjustment. Lessee agrees to reasonably cooperate with Lessor, if requested by Lessor or required by Applicable Law or the rules of the utility provider, to cause all electricity used at the Terminal to be separately metered or sub-metered at Lessee’s sole cost and expense.

5.2    Firewater. Lessor agrees that Lessee shall have access to and the right to use firewater from the Refinery’s firewater system. Such firewater shall be available at the existing interconnect points nearest the Terminal and at any other points hereinafter mutually agreed by the Parties. The cost and expense of providing firewater to the Terminal shall be included as part of Additional Rent. As further provided below, Lessor does not make, and hereby expressly disclaims, any and all representations or warranties (whether express, implied or statutory) as to the delivery pressure or volume of firewater that may be available to the Terminal, or as to any other aspects of any firewater services provided hereunder, and Lessee acknowledges that there may be times when the firewater

service to the Terminal is interrupted or unavailable. Lessee agrees that Lessor shall have access to the Terminal to operate, repair, inspect and maintain portions of the Refinery firewater system located therein, but Lessee acknowledges that Lessor shall have no duty to repair, maintain or inspect any firewater lines or equipment serving the Terminal.

5.3    Disclaimers.

MATTERS. FURTHER, LESSOR MAKES NO WARRANTY OR REPRESENTATION THAT THE UTILITIES OR FIREWATER SERVICES CONFORMS TO LESSEE’S SPECIFICATIONS OR ANY LEGAL OR INDUSTRY STANDARDS.

6.1    Use of Premises. Lessee shall have the right to use the Premises for the purpose of operating, maintaining, repairing and replacing the Terminal and Terminal Facilities and for any other lawful purpose associated with the operation and ownership of the Terminal and Terminal Facilities (the “Permitted Use”). Lessee shall not use the Premises (or permit the Premises to be used by or under Lessee) for any unlawful purpose. Lessee shall not use the Premises in any manner or for any purpose which will cause the forfeiture of or will violate any Applicable Law or in such a manner as to materially threaten or harm Lessor’s interest in the Premises. No activities or operations performed by or on behalf of Lessee under this Lease shall cause any interference with the operations of Lessor at the Refinery.

6.2    Waste. Lessee shall not commit, or suffer to be committed, any waste upon the Premises, ordinary wear and tear or damages to the extent caused by any Lessor Indemnified Party excepted, and subject to the provisions of Article 14.

6.3    Governmental Regulations. Lessee shall, at Lessee’s sole cost and expense, at all times comply with all Applicable Laws (including, without limitation, requirements under Environmental Laws, zoning laws, building and fire codes, and permitting requirements) now in force, or which may hereafter be in force, pertaining to the Premises or the ownership, operation and maintenance of the Terminal and Terminal Facilities, and

6.4    Refinery Site-Wide Permits. Lessee and Lessor shall use commercially reasonable efforts to cause the applicable Governmental Authorities, to the extent allowed by Applicable Law, to separate the Terminal and the Terminal Facilities from the coverage of any Refinery Site-Wide Permits following the Commencement Date in order to provide for separate Permits to be held directly by Lessee with respect to the Terminal. To the extent that the Terminal remains under any Refinery Site-Wide Permits or other Permits held directly by Lessor, Lessor agrees to allow (to the extent allowed by Applicable Law) such Terminal and/or Terminal Facilities to continue coverage under such Permits.

6.5    Security. Lessee agrees that Lessor is not required to provide any security or security services for the Premises under the terms of this Lease, and Lessee agrees not to, and waives any right to, make any claim against the Lessor Indemnified Parties for any Losses (including death) which are caused by, arise out of or in connection with, or are related to any lapse in or failure to provide security by Lessor at the Premises.

7.1    Terminal Improvements. Lessee may make any alterations, additions, improvements or other changes to the Terminal as may be necessary or useful in connection with the Permitted Use in Lessee’s reasonable discretion (collectively, the “Terminal Improvements”), without the prior written consent of Lessor, provided Lessee complies with the requirements of this Lease (including, without limitation, Section 6.3 and this Article 7) with respect thereto. Notwithstanding the foregoing or any other provision to the contrary contained herein, if there is a Partnership Change in Control, then Lessee shall not be permitted to make any Material Terminal Improvements (as defined below), without the prior written consent of Lessor, which may not be unreasonably withheld, conditioned or delayed; provided that Lessor’s consent shall not be required hereunder if the Terminal Improvements (i) are required by Applicable Law, (ii) are pursuant to Section 14.2 below or (iii) do not interfere in any material respect with the operations of the Refinery and do not materially increase any of Lessor’s obligations or liabilities under this Lease or any other related agreement. For purposes of this paragraph, the term “Material Terminal Improvements” mean any Terminal Improvements which cost in excess of $2,000,000. If Lessor’s consent is required hereunder, Lessor shall provide written notice to Lessee of Lessor’s acceptance or rejection of any proposed construction or material alteration within thirty (30) days after Lessor’s receipt of the written request for such consent and adequate written explanation and supporting written information respecting the proposed construction or material alteration. In no way shall Lessee act or represent to any contractor, subcontractor, materialman, supplier or laborer that it is acting on behalf of or as agent of Lessor with regard to any construction, maintenance, repair or other work whatsoever on or about the Premises.

7.2    Maintenance by Lessee. Except as otherwise expressly provided below in Article 14, Lessee shall at its sole cost, risk and expense at all times keep the Premises, the Terminal and all Terminal Facilities in good order and repair and make all necessary repairs thereto, structural and nonstructural, ordinary and extraordinary, and unforeseen and foreseen. When used in this Section 7.2, the term “repairs” shall include all necessary replacements, renewal, alterations and additions. All repairs made by Lessee shall be at least equal in quality and class to the original work. Lessee shall be responsible for its own janitorial services to the Premises, at its sole cost and expense. Lessor may (but shall not be obligated to) perform any repairs if Lessee fails to do so (following Lessor’s notice to Lessee and Lessee’s opportunity to cure such failure pursuant to Section 13.11(b) hereof, except in the event of an emergency situation), in which event Lessee shall reimburse Lessor for all reasonable costs and expenses incurred by Lessor in connection therewith.

7.3    Requirements for all Construction. In connection with any construction, alteration, repair, maintenance, or other similar work at or about the Premises done by or under Lessee, including any Lessee Improvements: (i) all work shall be performed in a good and workmanlike manner, and shall comply with all Applicable Laws; (ii) for construction or alterations requiring Lessor’s consent as described above, all construction and material alteration work shall be performed in accordance with plans and specifications previously approved by Lessor, which approval shall not be unreasonably withheld, conditioned, or delayed (provided that such plans and specifications shall be provided to Lessor in advance for Lessor’s review even if Lessor’s approval is not required under this Lease) and (iii) Lessee shall not permit any mechanics’, materialman’s or other liens to be filed or recorded against the Premises for any work or materials performed for or provided to Lessee (other than a notice of commencement or similar notice of the commencement of statutory lien

rights which is not a claim or notice of a failure to pay, and except for liens being contested in good faith by Lessee that Lessee has bonded over or otherwise taken appropriate steps to ensure cannot be foreclosed or otherwise enforced). Without limiting the foregoing, Lessee agrees to indemnify and hold harmless Lessor and the Premises from and against all claims, liens and demands (including, without limitation, mechanic’s and materialman’s liens) by or on behalf of any party, arising from the use, occupancy, conduct or management of or from any work or thing whatsoever done in, on or about the Premises by Lessee or any party acting under Lessee (other than any Lessor Indemnified Party).

7.4    Liability Disclaimer. No review or approval of plans, specifications or other information or documentation by Lessor shall constitute a representation or warranty by Lessor that such plans, specifications or other information or documentation satisfy any applicable laws or other requirements or will provide for a safe operation, and no such review or approval shall make Lessor otherwise liable with respect thereto. Lessee shall be solely responsible for determining whether its plans, specifications, construction and maintenance meet its needs, satisfy applicable laws and other requirements and will provide for a safe operation.

8.1    Lessor’s Access. Lessor and Lessor’s authorized representatives, upon at least 24 hours advance written notice to Lessee except in an emergency, shall have the right to enter upon the Premises at all reasonable times for the purpose of: (a) inspecting the same to determine whether the conditions and covenants contained in this Lease are being kept and performed, (b) inspecting, operating, repairing, or taking samples from any monitoring wells related to the Refinery that may be located on the Premises, (c) any reasonable measures for the safety and protection of the Premises or the Refinery or its occupants; (d) providing any of the services Lessor has agreed to provide to Lessee under this Lease, and/or (e) show the Premises to prospective lenders or purchasers; provided, however, that Lessor’s entry upon and/or inspection of the Premises shall not unreasonably interfere with Lessee’s operation of the Premises. Lessor or its representatives shall abide by all reasonable safety requirements of Lessee when entering the Premises.

9.1    Lessee’s Obligation to Pay. Lessee shall pay and discharge, prior to delinquency all Taxes which are levied or assessed, and/or which become payable during the Term upon all or any part of the Terminal, Terminal Facilities or Lessee’s use or operation of the Terminal. Upon written request by Lessor, Lessee shall provide Lessor evidence that Lessee has paid all Taxes within thirty (30) days thereafter. In the event Lessee fails to pay any such taxes before the final due date for those sums, Lessor may pay those sums to the taxing authority and any amounts paid by Lessor shall bear interest at the Interest Rate from the date paid by Lessor until repaid by Lessee.

9.2    Manner of Payment. Lessor and Lessee shall use commercially reasonable efforts to cause the Premises and the Terminal (including all Terminal Facilities) to be separately assessed for purposes of Taxes as soon as reasonably practicable following the Commencement Date (to the

extent allowed by applicable Law). During the Term, Lessee shall pay all Taxes assessed directly against the Premises, the Terminal and the Terminal Facilities directly to the applicable taxing authority prior to delinquency and shall promptly thereafter provide Lessor with evidence of such payment. In the event Lessor and Lessee are unable to cause the Premises, the Terminal and/or the Terminal Facilities to be separately assessed as provided above, Lessee shall pay or reimburse Lessor, upon request, for any such Taxes paid by Lessor to the applicable taxing authorities (the “Tax Reimbursement”). The Tax Reimbursement shall be equal to the total portion of such Taxes attributable to the Premises, Terminal and/or the Terminal Facilities, as determined in the reasonable discretion of Lessor, provided however, if the Premises are not rendered as a separate tax parcel the Tax Reimbursement as to the Premises shall equal the product of the total portion of Taxes relating to the combined land area of the Refinery and the Premises multiplied by a fraction, the numerator of which is the actual number of square feet of the Premises and the denominator of which is the total number of square feet of the combined land area of the Refinery and the Premises at the time of the assessment. The certificate issued or given by the appropriate officials authorized or designated by applicable Law to issue or give the same or to receive payment of such Taxes shall be prima facie evidence of the existence, payment, nonpayment and amount of such Taxes. Lessee may contest the validity or amount of any such Taxes or the valuation of the Premises and/or the Terminal and the Terminal Facilities, at Lessee’s sole cost and expense, by appropriate proceedings, diligently conducted in good faith in accordance with applicable Law. If Lessee contests such items, then Lessor shall cooperate with Lessee in any such contesting of the validity or amount of any such Taxes or the valuation of the Premises and/or the Terminal and the Terminal Facilities. Taxes for the first and last years of the Term shall be prorated between the parties based on the portions of such years that are coincident with the applicable tax years and for which each applicable party is responsible.

10.1    Compliance. During the Term, Lessee shall comply with Environmental Laws applicable to its operations and business at or on the Premises which compliance shall include handling, storing, and disposing of all substances at, in or on the Premises in compliance with all applicable Environmental Laws and satisfying any and all environmental enforcement, permitting, notifications or reporting requirements directly arising out of Lessee’s use of the Premises, as required by Applicable Law. Without limiting the foregoing, Lessee shall not (a) use or knowingly permit the use by or under Lessee or any vendors, equipment lessors, invitees, licensees, carriers, contractors or subcontractors of any tier of any of the Lessee Indemnified Parties (collectively, the “Lessee Responsible Parties”) of the Premises for the on-site disposal of Hazardous Substances or any other activities in violation of Environmental Laws, or (b) Release, or knowingly allow the Release by or under Lessee or any Lessee Responsible Parties, of any Hazardous Substances onto the Premises or adjacent lands or waters in violation of or at concentrations that exceed those allowed by Environmental Laws.

10.2    Hazardous Substances. Lessee may not store any types or quantities of Hazardous Substances on the Premises except for petroleum products (including denatured ethanol and dyes and additives customarily blended with petroleum products at truck racks) used, stored and handled

in connection with the operation of the Terminal in accordance with the Permitted Use and de minimis quantities of other Hazardous Substances, provided that such Hazardous Substances are used, stored, and otherwise handled in compliance with applicable Environmental Laws.

10.3    Notices.

10.4    Cleanup. If during the Term, Lessee discovers any leak, spill, overflow, outflow or escape of any Hazardous Substances brought onto or produced on the Premises by or on behalf of Lessee at concentrations exceeding those allowed by Environmental Laws, Lessee shall promptly, at its sole cost and expense: (a) notify applicable federal, state and local agencies, if required by Environmental Laws; (b) make all reasonable and necessary arrangements for stopping such leak, spill, overflow, outflow or escape; and (c) clean up, remove and dispose of, pursuant to applicable Environmental Laws, such Hazardous Substances wherever such may be found (“Environmental Cleanup”). If Lessee fails to perform or complete any legally required Environmental Cleanup, Lessor may (at its option) conduct the Environmental Cleanup and Lessee hereby agrees to reimburse Lessor for Lessor’s reasonable out-of-pocket costs and expenses in conducting such Environmental Cleanup within thirty (30) days after Lessee’s receipt of a bill therefor including a written itemization and documentation for such costs and expenses.

10.5    Lessee Indemnity. Except to the extent otherwise provided in the Omnibus Agreement (which shall govern and control in the event of any conflict with this Section 10.5), Lessee shall indemnify, defend and hold harmless the Lessor Indemnified Parties from and against all Losses suffered or incurred by any of the Lessor Indemnified Parties, directly or indirectly, including as a result of any claim by a third party, by reason of or arising out of:

11.1    Lessee agrees to maintain during the Term hereof (i) all risk property insurance with respect to the Terminal Facilities and all improvements, equipment and other personal property (for the full replacement value thereof) owned by Lessee or used by Lessee on the Premises; (ii) commercial general liability insurance covering injury or death to persons or damage to property in an amount of not less than One Million and 00/100 Dollars ($1,000,000.00) per occurrence including, but not limited to, the following coverages: Contractual Liability, Products and Completed operations, Coverage for explosion, collapse and underground hazards, and sudden and accidental pollution liability; (iii) Automobile bodily injury and property damage liability insurance, including but not limited to insurance for pollution-related events, which extends to owned, if any, non-owned, and hired automobiles used by Lessee in connection with its operations, the limits of which liability of such insurance shall not be less than One Million and 00/100 Dollars ($1,000,000.00) combined single limit for bodily injury and property damage combined per accident; (iv) Workers’ Compensation Insurance for statutory limits and employer’s liability coverage in an amount not less than One Million and 00/100 Dollars ($1,000,000.00) or as required by applicable law; and (v) excess liability/umbrella coverage in excess of underlying coverages in a limit not less than Fifteen Million and No/100 Dollars ($15,000,000) any one occurrence and in the aggregate.

11.2    All such policies, except for Workers’ Compensation, shall name Lessor and its ultimate parent, Valero and its respective subsidiaries and Affiliates as additional insureds to the fullest extent permitted by applicable Law, such that the breadth of coverage afforded such additional insureds under the policies is at least as broad as that afforded the primary insured under such policies, and in all events such that the policies will respond to losses arising out of any act, omission, failure to act or negligence on the part of any such additional insured relating to the performance of Lessee’s obligations under this Lease, including losses associated with completed operations. All such policies shall also include a provision making them primary over (and not secondary to or contributory with) any insurance carried by Lessor or any other additional insured added pursuant to this Lease. With respect to all policies, Lessee shall waive, and does waive, all rights of subrogation as against the Lessor Indemnified Parties and the Lessee Indemnified Parties. There shall be no

gap in the dollar value of the additional insureds’ coverage under the above policies from the policies’ deductible amounts up to the full limits of the policies. Contemporaneously with its execution of this Lease and on each yearly anniversary thereafter, Lessee shall furnish certificates of insurance evidencing that such insurance is in effect, and that the required waivers of subrogation and additional insured endorsements have been provided, and containing the unequivocal agreement on the part of the insurer to notify Lessor of any cancellation or material change in coverage at least 30 days before the effective date of such cancellation or change. The insurance coverage required hereunder shall operate independent and apart from any of Lessee’s indemnity obligations hereunder and shall in no way serve to waive or limit any such obligations.

12.1    Indemnification by Lessee. Except in respect of Losses related to environmental matters, which are exclusively addressed in Article 10 hereof, Lessee agrees to indemnify, defend and hold harmless the Lessor Indemnified Parties from and against any and all Losses which may be imposed on, incurred by or asserted against the Lessor Indemnified Parties, in any way and to the extent relating to or arising out of (i) actions taken or omissions any of the Lessee Indemnified Parties or any Lessee Responsible Parties in connection with the ownership, use or operation of the Terminal, Terminal Facilities and/or the Premises or any accident or occurrence in connection therewith, (ii) any failure to perform any covenant or agreement made or undertaken by Lessee in this Lease, (iii) the use and/or occupation of the Premises, by Lessee and any of the Lessee Responsible Parties and/or (iv) any injury or damage to any person or property, occurring in or about the Premises; provided, however, that Lessee shall not be required to indemnify the Lessor Indemnified Parties for any Losses under clauses (i), (ii), (iii) or (iv), to the extent resulting from or arising out of the sole or gross negligence or willful misconduct of any of the Lessor Indemnified Parties. IT IS INTENDED THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING INDEMNIFICATION SHALL OPERATE TO PROTECT THE LESSOR INDEMNIFIED PARTIES AGAINST EVEN THOSE LOSSES THAT ARE CAUSED OR ALLEGEDLY CAUSED, IN WHOLE OR IN PART, BY THE SOLE, PARTIAL, JOINT, JOINT AND SEVERAL, COMPARATIVE OR CONTRIBUTORY NEGLIGENCE (BUT NOT THE GROSS NEGLIGENCE) OF ANY OF THE LESSOR INDEMNIFIED PARTIES, OR FOR WHICH ANY OF THE LESSOR INDEMNIFIED PARTIES MAY BE LIABLE UNDER ANY SO-CALLED “STRICT LIABILITY” LAW OR ANY OTHER APPLICABLE LAW OR LEGAL THEORY IMPOSING LIABILITY ON A PERSON WITHOUT REGARD TO SUCH PERSON’S ACTUAL DEGREE OF FAULT OR NEGLIGENCE.

12.2    Indemnification by Lessor. Except to the extent otherwise provided in the Omnibus Agreement (which shall govern and control in the event of any conflict with this Section 12.2), and except with respect to Losses related to environmental matters, which are exclusively addressed in Article 10 hereof, Lessor agrees to indemnify, defend and hold harmless the Lessee Indemnified Parties from and against any Losses which may be imposed on, incurred by or asserted against the Lessee Indemnified Parties as a result of, caused by, arising out of, or in any way relating to any injury or damage to any person or property, occurring in or about the Premises as a direct result of

the sole negligent act or omission or gross negligence or willful misconduct of any of the Lessor Indemnified Parties.

12.3    Survival. Notwithstanding anything contained in this Lease to the contrary, the provisions of this Article 12 shall survive the expiration or earlier termination of this Lease.

13.1    Lessee Event of Default. Each of the following events shall be an event of default (“Event of Default”) by Lessee under this Lease:

13.2    Lessor’s Remedies.

or Event of Default) to do any one or more of the following: exercise all remedies available at law or equity including, without limitation, the bringing of an action for damages or an injunction on account of such default or Event of Default or for specific performance of this Lease, or:

at any time thereafter elect in writing to terminate this Lease for such previous breach.

13.3    No Waiver. Exercise by Lessor of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance of surrender of the Premises and/or a termination of this Lease by Lessor, whether by agreement or by operation of law, it being understood that such surrender and/or termination can be effected only by the written agreement of Lessor and Lessee. Any law, usage, or custom to the contrary notwithstanding, Lessor shall have the right at all times to enforce the provisions of this Lease in strict accordance with the terms hereof; and the failure of Lessor at any time to enforce its rights under this Lease strictly in accordance with same shall not be construed as having created a custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease or as having modified the same. Lessee and Lessor further agree that forbearance or waiver by Lessor to enforce its rights pursuant to this Lease or at law or in equity, shall not be a waiver of Lessor’s right to enforce one or more of its rights in connection with any subsequent default. A receipt by Lessor of rent or other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach, and no waiver by Lessor of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Lessor. The terms “enter,” “re-enter,” “entry” or “re-entry,” as used in this Lease, are not restricted to their technical legal meanings. Any reletting of the Premises shall be on such terms and conditions as Lessor in its sole discretion may determine (including without limitation a term different than the remaining Lease Term, rental concessions, alterations and repair of the Premises, lease of less than the entire Premises to any tenant and leasing any or all other portions of the Project before reletting the Premises). Lessor shall not be liable, nor shall Lessee’s obligations hereunder

be diminished because of, Lessor’s failure to relet the Premises or collect rent due in respect of such reletting.

13.4    Lessor Event of Default. If Lessor shall violate, neglect or fail to perform or observe any of the covenants, terms, conditions, agreements, or obligations contained in this Lease on its part to be performed or observed, which default continues for a period of more than thirty (30) days after its receipt of written notice from Lessee specifying such default (provided that if such default is of a nature that cannot reasonably be cured within thirty (30) days, then as long as Lessor commences to cure said default within such thirty (30) day period and thereafter diligently pursues such efforts to completion, but in no event longer than one hundred eighty (180) days after the date Lessee sends the default notice, then Lessor shall be deemed to have cured such default for purposes of this paragraph), Lessee may, at its election (in addition to any other rights or remedies provided Lessee at law, in equity or hereunder), upon further written notice to Lessor: (i) effect such a cure and incur any reasonable expense or cost necessary to perform such obligation of Lessor and bill Lessor for the reasonable cost thereof and Lessor shall pay all such reasonable costs and expenses incurred by Lessee within thirty (30) days after Lessor’s receipt of such notice, which notice shall include an itemization and documentation of the expenses and costs incurred by Lessee; or (ii) notwithstanding the foregoing notice requirement, in the event of an emergency, to provide Lessor with such notice as is reasonable thereof and to effect a cure and incur such expenses as necessary to effect such cure in order to protect and prevent the loss of life and/or risk of loss, life or property and Lessor shall pay all such reasonable costs and expenses within thirty (30) days after Lessor’s receipt of notice thereof and written itemization and documentation for such expenses; (ii) initiate an action for damages, specific performance or an injunction; (iii) terminate this Lease by the giving of written notice to Lessor; or (iv) pursue any remedies available to Lessee at law or in equity.

14.1    Eminent Domain. If the whole or any substantial part, in Lessor’s discretion of the Premises should be taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a “Taking”), this Lease shall terminate and the Rent shall be abated during the unexpired portion of this Lease, effective when the physical taking of the Premises shall occur. If there is a Taking of less than a substantial part of the Premises, this Lease shall not terminate, but the Base Rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonable under all of the circumstances. In the event of any such Taking, Lessor and Lessee shall each be entitled to receive and retain such separate awards and/or portion of lump sum awards as may be allocated to their respective interests in any condemnation proceedings. Lessor shall be entitled to any award and all damages payable as a result of any condemnation or taking of the fee of the Premises. Lessee shall have the right to claim and recover from the condemning authority, but not from Lessor, such compensation as may be separately awarded or recoverable by Lessee in Lessee’s own right on account of any and all damage to the Terminal Facilities and/or Lessee’s business by reason of the condemnation, including loss of value of any unexpired portion of the Term, and for or on account of any cost or loss to which Lessee might be put in removing Lessee’s personal property, fixtures,

leasehold improvements and equipment, including, without limitation, the Terminal Facilities, from the Premises.

14.2    Casualty.

15.1    Surrender of Premises. Lessee shall at the expiration of the Term, or at any earlier termination of this Lease, surrender the Premises to Lessor in as good condition as it received the Premises, ordinary wear and tear and damaged caused by any Lessor Indemnified Parties excepted, and subject to the provisions of Article 14.

15.2    Removal of Improvements. Except as otherwise expressly agreed to by Lessor and Lessee, Lessee shall have the right to remove all Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property installed by Lessee from the Premises upon the termination or expiration of this Lease, but in no event later than the date that is 120 days following the expiration or termination of this Lease(the “Removal Date”). Lessee shall provide Lessor with written notice of its election to remove the Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property from the Premises at least 60 days prior to the expiration of the Lease. If Lessee elects to remove the Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property from the Premises after such removal Lessee shall restore any damage to the Premises and clean the Premises so as to eliminate therefrom any accumulation (other than any de minimis and non-hazardous

accumulation) of foreign substances, materials, or debris, in addition to any Environmental Cleanup that may be required under Article 10. Lessee shall pay Lessor pro rata Rent (based on the amount of Rent applicable during the last month prior to the termination or expiration) through the date of Lessee’s complete removal of all such items. During the period of such removal and clean-up, all terms and conditions of this Lease, including, the indemnity and insurance provisions shall continue in full force and effect. If Lessee elects not to remove all of the Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property installed by Lessee from the Premises, and provided that such facilities are in good working condition at the expiration of the Term (ordinary wear and tear excepted) then, such Terminal Facilities and other improvements fixtures, equipment, materials, supplies and personal property installed by Lessee shall be deemed permanently abandoned to Lessor’s sole ownership, and Lessor may remove and dispose of such facilities in any manner which Lessor may deem appropriate, without any liability whatsoever to Lessee. If Lessee elects not to remove all of the Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property installed by Lessee from the Premises and such facilities are not in good working condition at the expiration of the term (ordinary wear and tear excepted), or Lessee fails to so remove any or all of the Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property installed by Lessee from the Premises before the Removal Date, then, in addition to all rights and remedies available at law or in equity, without any prior notice, Lessor may (but shall be under no obligation), at Lessor’s option, deem such Terminal Facilities and other improvements fixtures, equipment, materials, supplies and personal property installed by Lessee, to be permanently abandoned to Lessor’s sole ownership, and Lessor may remove and dispose of such facilities in any manner which Lessor may deem appropriate, without any liability whatsoever to Lessee, and Lessee shall reimburse Lessor for all costs of such removal and disposal upon demand from Lessor. If requested by Lessor, shall execute any and all documents necessary to evidence that title to the Terminal Facilities and other improvements, fixtures, equipment, materials, supplies and personal property installed by Lessee that Lessee does not remove by the Removal Date is in Lessor and to extinguish and remove any cloud or potential cloud on the title to the Premises and/or such facilities created by Lessee.

15.3    Holding Over. If Lessee retains possession of the Premises after the termination of the Term, unless otherwise agreed in writing or for removal of its facilities during the Removal Period, such possession shall be subject to immediate termination by Lessor at any time, and all of the other terms and provisions of this Lease (excluding any expansion or renewal option or other similar right or option) shall be applicable during such holdover period, except that Lessee shall pay Lessor from time to time, upon demand, as Base Rent for the holdover period, an amount equal to 150% of the Base Rent in effect on the termination date computed on a monthly basis for each month or part thereof during such holding over. All other payments shall continue under the terms of this Lease. In addition, Lessee shall be liable for all damages incurred by Lessor as a result of such holding over. No holding over by Lessee, whether with or without consent of Lessor, shall operate to extend this Lease except as otherwise expressly provided, and this Section 15.3 shall not be construed as consent for Lessee to retain possession of the Premises.

16.1    Release of Certain Liability. Except in the event of sole or gross negligence or willful misconduct on the part of Lessor or its employees or agents, Lessor shall not be liable to Lessee or any of the Lessee Responsible Parties or any other person claiming by, through or under Lessee or entering upon the Premises under or with the express or implied invitation of Lessee for any personal injury, including death, to persons or damage to property due to (i) the condition or design or any defect in the Premises, (ii) any portion of the Premises becoming out of repair or arising from the leaking of gas, water, sewer, steam, pipes, electricity or otherwise. Lessee, with respect to itself and the Lessee Responsible Parties or any other person entering upon the Premises under or with the express or implied invitation of Lessee hereby expressly assumes all risks of personal injury, including death, to persons or damage to property, either proximate or remote, by reason of the present or future condition of the Premises and expressly release Lessor of and from any and all liability for such damage or loss.

16.2    Exculpation. Any liability of Lessor under the terms of this Lease or in connection with the Premises shall be limited to the interest of Lessor in the Premises and Lessor shall not be personally liable for any deficiency. None of Lessor’s officers, managers, partners, members, employees, agents or representatives will ever have any personal liability to Lessee under or in connection with this Lease, and Lessee hereby waives and releases all claims, causes of action, or other rights of recovery it may ever have against such parties under or in connection with this Lease. NOTWITHSTANDING ANY PROVISION OF THIS LEASE TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY HERETO BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES (IN TORT, CONTRACT OR OTHERWISE) UNDER OR IN RESPECT OF THIS LEASE, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE OWED TO A THIRD PARTY AND THE OBLIGATED PARTY IS ENTITLED TO INDEMNIFICATION THEREFOR BY THE OTHER PARTY UNDER THE EXPRESS TERMS OF THIS LEASE.

17.1    Assignment by Lessor. Lessor may assign or transfer its rights, interests, and obligations under this Lease and in any part of the Premises to any third party (including any Person who acquires the Refinery or any interest therein), provided that an such third party expressly assumes all obligations of Lessor under the Lease for the period on and after the effective date of the assignment and Lessor shall remain liable for the performance and obligations of lessor/landlord hereunder for the period prior to the effective date of such assignment. Upon any such transfer Lessee will attorn to the transferee lessor and look solely to the transferee lessor to perform any obligations of Lessor accruing on or after the effective date of the transfer.

17.2    Assignment and Sublease by Lessee. Lessee shall not assign, pledge or encumber this Lease, or sublet the whole or any part of the Premises without the prior written consent of Lessor. This prohibition against assigning or subletting shall be construed to include a prohibition against any assignment or subletting by operation of law. For purposes of this paragraph, a transfer of the ownership interests controlling Lessee shall be deemed an assignment of this Lease. In the event any assignment or subletting of this Lease is made with or without Lessor’s consent, Lessee shall

nevertheless remain liable for the performance of all of the terms, conditions and covenants of this Lease. Any assignment or subletting without the prior written consent of Lessor shall be void and constitute a breach of the Lease and shall, at the option of the Lessor, terminate the Lease. No consent to any assignment, voluntarily or by operation of law, of this Lease or any subletting of said Premises shall be deemed to be a consent to any subsequent assignment or subletting.

17.3    Permitted Transfers. Notwithstanding the prohibition on assignment in Section 17.2 hereof, Lessee may assign all of its interest in this Lease or sublet all of the Premises only by written instrument evidencing such assignment or sublease to any Affiliate of Lessee or any Person who purchases or acquires all or substantially all of the Terminal and Terminal Facilities of Lessee, or any successor to Lessee by merger, consolidation or otherwise (each a “Permitted Transferee”), provided that (i) Lessee shall promptly notify Lessor of any such Permitted Transfer, (ii) Lessee shall remain liable for the performance of all of the obligations of Lessee hereunder or (iii) if Lessee no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Lessee hereunder. Additionally, the Permitted Transferee shall assume all of Lessee’s obligations and comply with all of the terms and conditions of this Lease. Promptly after the effective date of any permitted transfer hereunder, Lessee agrees to furnish Lessor with copies of the instrument effecting any of the foregoing transfers and documentation establishing Lessee’s satisfaction of the requirements set forth above applicable to any such assignment or sublet. The occurrence of a permitted transfer hereunder shall not waive Lessor’s rights as to any subsequent assignment, subletting or other transfer of this Lease or any interest therein. Any subsequent assignment, subletting or other transfer of this Lease or any interest therein by a Permitted Transferee shall be subject to Lessor’s prior written consent (as hereinabove provided).

18.1    Lessor covenants and warrants that Lessee, upon paying the Rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Lessee’s part to be observed and performed hereunder, may peaceably and quietly have, hold, occupy, use and enjoy, and shall have the full, exclusive and unrestricted use and enjoyment of, all the Premises during the Term for the Permitted Use and subject to the terms and conditions of this Lease, and Lessor agrees to warrant and forever defend title to the Premises (other than the Permitted Exceptions) against the claims of any and all persons whomsoever lawfully claiming or to claim the same or any part thereof. Lessor’s undertaking in the immediately preceding sentence is made solely for the benefit of Lessee and not for the benefit of any title insurer, and any such title insurer shall not be subrogated to the rights of Lessee hereunder.

19.1    Estoppel Certificates. Lessee and Lessor shall, at any time and from time to time upon not less than 20 days prior written request from the other party, execute, acknowledge and deliver to the other a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so

modified, is in full force and effect) and the date to which Rent and other charges are paid, and (ii) acknowledging that there are not, to the executing party’s knowledge, any uncured defaults on the part of the other party hereunder (or specifying such defaults, if any are claimed). Any such statement may be conclusively relied upon by any prospective purchaser of the Premises or the leasehold. Nothing in this Section 19.1 shall be construed to waive the conditions elsewhere contained in this Lease applicable to assignment or subletting of the Premises by Lessee.

19.2    Leasehold Mortgage. Lessee shall at all times and from time to time have the right to encumber by mortgage, deed of trust, or security agreement (the “Mortgage”) Lessee’s leasehold estate in the Premises, together with Lessee’s rights and interests in all buildings, fixtures, equipment, and improvements situated thereon, and all rents, issues, profits, revenues, and other income to be derived by Lessee therefrom, to secure such loans from time to time made by any Person to Lessee; provided, however, that such Mortgage shall in no event encumber Lessor’s fee title and interest in the Premises or Lessor’s interest under this Lease.

19.3    Subordination, Non-Disturbance and Attornment. Upon request of Lessor or the holder of any Mortgage covering Lessor’s interest in the Premises (a “Mortgagor”), Lessee will enter into a subordination, non-disturbance and attornment agreement in a customary form reasonably acceptable to the Mortgagor, Lessor and Lessee, evidencing that Lessee’s rights under this Lease are subordinate to the lien of such Mortgage and to all advances made or thereafter to be made upon the security thereof.

19.4    Conflict Between this Lease and the Omnibus Agreement. Notwithstanding any provision to the contrary contained herein, for so long as the Omnibus Agreement remains in full force and effect, to the extent of any conflict between the terms of this Lease and the terms of the Omnibus Agreement, the terms of the Omnibus Agreement shall govern and control. Further, notwithstanding any waiver or agreement of either of the parties hereto contained in this Lease, no such waiver or agreement shall affect or limit the rights or remedies of such party under the Omnibus Agreement, or the obligations and liabilities of the other parties to the Omnibus Agreement.

19.5    Notices. All notices, requests, demands and other communications required or permitted to be given under this Lease shall be deemed to have been duly given if in writing and delivered personally or sent via first class, postage prepaid, registered or certified mail (return receipt requested), or by overnight delivery service or facsimile transmission addressed as follows:

If to Lessor:

Valero Refining Company-Tennessee, L.L.C.

One Valero Way

San Antonio, Texas 78249

Attention: General Counsel

Facsimile: (210) 345-3214

If to Lessee:

Valero Partners Memphis, LLC

One Valero Way

San Antonio, Texas 78249

Attention: General Counsel

Facsimile: (210) 345-3214

Any party may change the address to which the communications are to be directed to it by giving notice to the other in the manner provided in this Section 19.5. Notice by mail shall be deemed to have been given and received on the third calendar day after posting. Notice by overnight delivery service, facsimile transmission or personal delivery shall be deemed given on the date of actual delivery.

19.6    Mutual Cooperation; Further Assurances. Upon request by either party from time to time during the Term, each party hereto agrees to execute and deliver all such other and additional instruments, notices and other documents and do all such other acts and things as may be necessary to carry out the purposes of this Lease and to more fully assure the parties’ rights and interests provided for hereunder. Lessor and Lessee each agree to cooperate with the other on all matters relating to required permits and regulatory compliance by either Lessee or Lessor in respect of the Premises so as to ensure continued full operation of the Premises by Lessee pursuant to the terms of this Lease.

19.7    Recording. Upon the request of either Party, Lessor and Lessee shall execute, acknowledge, deliver and record a “short form” memorandum of this Lease in a form mutually acceptable to the Parties and sufficient to provide public notice of the existence of this Lease. Promptly upon request by Lessor at any time following the expiration or earlier termination of this Lease, however such termination may be brought about, Lessee shall execute and deliver to Lessor an instrument, in recordable form, evidencing the termination of this Lease and the release by Lessee of all of Lessee’s right, title and interest in and to the Premises existing under and by virtue of this Lease.

19.8    Force Majeure. In the event of Lessor or Lessee being rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Lease, other than to make payments due hereunder, it is agreed that on such party’s giving notice and full particulars of such Force Majeure to the other party as soon as practicable after the occurrence of the cause relied on, then the obligations of the parties, so far as they are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused but for no longer period, and such cause shall, as far as possible, be remedied with all reasonable dispatch. The term “Force Majeure” as employed herein means any circumstances beyond the reasonable control of the contracting parties experiencing such inability to perform, whether of the kind enumerated herein or not, including but not limited to, acts of God, strikes, lockouts, or other industrial disturbances, curtailments or shutdowns, acts of the public enemy, sabotage, wars (whether or not an official declaration is made thereof), blockades, insurrection, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, freezeoffs, civil disturbances, explosions, breakage, accidents to machinery, equipment or lines of pipe, repairs, maintenance, improvements, replacements or alterations to plants or lines of pipe, inability of either party to obtain necessary machinery, materials or permits, or the act of any Governmental Authority. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and

that the above requirements that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the party having the difficulty.

19.9    Entire Agreement; Amendment. Subject to Section 19.4, this Lease, including the exhibits attached hereto, constitutes the entire agreement and understanding between the parties hereto with respect to the lease of the Premises, and supersedes all prior and contemporaneous agreements and undertakings of the parties, in connection herewith. This Lease may be modified in writing only, signed by the parties to interest at the time of modification.

19.10    Binding Effect. Except as herein otherwise expressly provided, this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors, sublessees and assigns. Nothing in this Section shall be construed to waive the conditions elsewhere contained in this Lease applicable to assignment or subletting of the Premises by Lessee.

19.11    Waivers. No waiver or waivers of any breach or default or any breaches or defaults by either party of any term, condition or liability of or performance by the other party of any duty or obligation hereunder shall be deemed or construed to be a waiver or waivers of subsequent breaches or defaults of any kind, character or description under any circumstance. The acceptance of Rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular Rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such Rent.

19.12    No Partnership. The relationship between Lessor and Lessee at all times shall remain solely that of landlord and tenant and shall not be deemed a partnership or joint venture.

19.13    Choice of law. The provisions of this Lease shall be governed by and construed in accordance with the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might require the application of laws of another jurisdiction.

19.14    Waiver of Jury Trial. LESSEE AND LESSOR WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LESSOR AND LESSEE ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

19.15    Severability. The invalidity or unenforceability of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity or enforceability of any other provision hereof.

19.16    Survival. All obligations of Lessor and Lessee that shall have accrued under this Lease prior to the expiration or earlier termination hereof shall survive such expiration or termination to the extent the same remain unsatisfied as of the expiration or earlier termination of this Lease. Lessor and Lessee further expressly agree that all provisions of this Lease which contemplate performance

after the expiration or earlier termination hereof shall survive such expiration or earlier termination of this Lease.

19.17    Time of Essence. Time is of the essence in the performance of all obligations falling due hereunder.

19.18    Captions. The headings to Articles, Sections and other subdivisions of this Lease are inserted for convenience of reference only and will not affect the meaning or interpretation of this Lease.

19.19    Schedules and Exhibits. All schedules and exhibits hereto which are referred to herein are hereby made a part hereof and incorporated herein by such reference.

19.20    Counterparts. This Lease may be executed in multiple originals and when executed, all such counterparts shall constitute one document.

The parties hereto have executed this Lease to be effective as of the Commencement Date.

Description of the remainder of Parcel 4 and Parcel 6 of the Valero Refining Company - Tennessee, L.L.C. property recorded at Instrument No. 08050203 in Memphis, Shelby County, Tennessee:

Beginning at a point in the west line of Riverport Road (42’ from centerline), said point being the south end of a curve having a radius of 80.00 feet located 101.73 feet south of the tangent intersection of the west line of said Riverport Road and the south line of West Mallory Avenue (R.O.W. varies); thence in a southerly direction with the west line of said Riverport Road the following calls: along a curve to the right having a radius of 398.74 feet, delta angle of 19 degrees 01 minutes 04 seconds, chord = south 28 degrees 26 minutes 23 seconds west - 131.74 feet, an arc length of 132.35 feet to a point of tangency; south 37 degrees 56 minutes 55 seconds west, 266.83 feet to a set 1/2” rebar with plastic cap in the north line of the Illinois Central Gulf Railroad Company property recorded at Instrument No. H2-0883 (“Industrial Avenue”); thence in a westerly direction with the north line of said property recorded at Instrument No. H2-0883 the following calls: north 78 degrees 06 minutes 24 seconds west, 90.53 feet to a point of curvature; along a curve to the left having a radius of 3675.00 feet, delta angle of 04 degrees 14 minutes 06 seconds, chord = north 80 degrees 13 minutes 27 seconds west - 271.58 feet, an arc length of 271.64 feet to a set 1/2” rebar with plastic cap in the east line of Interstate 55 (R.O.W. varies); thence in a northerly direction with the east line of said Interstate 55 the following calls: north 26 degrees 54 minutes 06 seconds west, 23.04 feet to a set 1/2” rebar with plastic cap; north 04 degrees 37 minutes 43 seconds west, 96.09 feet to a found concrete monument in the south line of the Valero Refining Company - Tennessee, L.L.C. property recorded at Instrument No. 08111644; thence north 51 degrees 32 minutes 01 seconds east with the south line of said property recorded at Instrument No. 08111644, 162.26 feet to a point; north 20 degrees 03 minutes 36 seconds east with the east line of said property recorded at Instrument No. 08111644, 206.17 feet to a point in the south line of the aforesaid West Mallory Avenue; thence in an easterly direction with the south line of said West Mallory Avenue the following calls: south 70 degrees 30 minutes 09 seconds east, 47.96 feet to a point of curvature; along a curve to the left having a radius of 278.00 feet, delta angle of 17 degrees 14 minutes 03 seconds, chord = south 79 degrees 07 minutes 10 seconds east - 83.31 feet, an arc length of 83.62 feet to a point of tangency; south 87 degrees 44 minutes 14 seconds east, 135.61 feet to a point; south 84 degrees 42 minutes 32 seconds east, 72.96 feet to a point of curvature; along a curve to the right having a radius of 80.00 feet, delta angle of 103 degrees 38 minutes 23 seconds, chord = south 32 degrees 53 minutes 20 seconds east - 125.77 feet, an arc length of 144.71 feet to the Point of Beginning and containing 4.276 acres of land.

PARCEL B:

Description of the Valero Refining Company - Tennessee, L.L.C. property recorded at Instrument No. 08111644 in Memphis, Shelby County, Tennessee:

Beginning at a found concrete monument at the intersection of the south line of West Mallory Avenue (R.O.W. varies) and the east line of Interstate 55 (R.O.W. varies); thence south 77 degrees 12 minutes 36 seconds east with the south line of said West Mallory Avenue, 137.93 feet to a point in the west line of Parcel 6 of the Valero Refining Company - Tennessee, L.L.C. property recorded at Instrument No. 08050203; thence in a southerly direction with the west line of Parcel 6 of said property recorded at Instrument No. 08050203 the following calls: south 20 degrees 03 minutes 36 seconds west, 206.17 feet to a point; south 51 degrees 32 minutes 01 seconds west, 162.26 feet to a found concrete monument in the east line of the aforesaid Interstate 55; thence north 11 degrees 00 minutes 34 seconds east with the east line of said Interstate 55, 331.23 feet to the Point of Beginning and containing 0.725 acres of land.